The main suspect behind the attack was named as Amiram Ben-Uliel, 21, while a minor was charged as an accessory.
A relative visits the burnt-out home of Saad Dawabshe, who was killed with his wife and toddler son when Jewish extremists firebombed their house in the West Bank village of Duma in July.
Some observers say the attack – which drew global condemnation at the time – was a key factor in a recent outbreak of violence that has left at least 144 Palestinians and 25 Israelis dead since October 1.
In the attack on July 31, three members of a Dawabsheh family, including a 18-month-old baby Ali, were killed.
Speaking at a cabinet meeting before the indictments were announced, Benjamin Netanyahu, the Israeli prime minister, said the country stands against murder and violence “of any kind”.
Majdi Mohammed/AP The arson went unsolved for several months and fueled Israeli-Palestinian violence, including a clash at the entrance to Duma village near the West Bank city of Nablus. A second suspect, whose name was withheld as a 17-year-old minor, was charged with aiding murder, Israeli police spokeswoman Luba Samri said.
Israeli leadership has largely defended the agency, who in the wake of the allegations released a statement warning against the growing influence of Jewish extremist groups over the Israeli government.
Members of the group often begin as Hilltop Youth, hardline settlers who live in illegal outposts in the West Bank and cause damage to properties and land belonging to Palestinians, but then move on to the more violent activities of Revolt Group, Channel 2 reported.
Ben-Uliel said he carried out the attack in revenge for the killing of Malachy Rosenfeld, 25, in a drive-by shooting in the West Bank in June.
“The investigation was of national importance and came to an end with the filing of indictments”, the police said.
Nasser Dawabsheh, Saad’s brother, said the indictments were not enough. A lawyer for one of the suspects says his client gave a forced confession after interrogators deprived him of sleep and tied him upside down by his feet. The Jewish extremists have been linked to what’s referred to in Israel as “price tag” attacks on Palestinians, mosques and churches, pro-peace Israelis and the military.